I am going to have to go back on my pledge to talk about things other than the ghastly credit crunch. There just isn't anything else other than that going on. In fact, it has infiltrated every aspect of anything that involves money. The collapse this week of the Icelandic bank Landsbanki has shown how far and wide something can spread.
Now when I heard that a few Icelandic banks had collapsed, it all seemed a little irrelevant to me. I mean, what difference could that really make to you and me? Well a lot more than I thought, apparently.
Up to £1bn has been deposited by local authorities across the country into Icelandic banks. My first impression was, why they can't just put it in the bank down the road like any normal person?. However, this is not just your standard current account. This is money deposited with the intention of making money. Inevitably, when you stake money, you run the risk of losing some, or even all of it. In fact, this sounds an awful lot like gambling to me.
All over the country, councils are preparing for the worst, as although many believe their money will be safe, many know that there is no guarantee they will ever see their stake again.
Both Wirral and Cheshire councils, for example, have bonds and investments totalling around £19m, small in comparison to the £1bn total, but a huge amount that could've gone a lot further than paying for some Icelandic millionaire's indulgence, which has clearly gone on for a little bit too long.
It seems, however, that everything is going to be ok. A spokesperson for Wirral Council played down any major impact, claiming that their investments should be honoured, and also citing the fact that they had earnt £4m in the previous year through investments. It all seems a bit ludicrous though to me. Surely the authorities can't afford to go risking large sums of taxpayers money on questionable investments. It seems that whoever is gambling has got away with it this time.
Wirral and Cheshire council millions at risk in Icelandic banks
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2 comments:
Hi,
Surely the point is that no interest accruing account in any national bank has appeared to be a risk in the last 50 years, apart from those dodgy Nigerian ones that spell your name wrong and ask you to email them your bank details, but suddenly everything and anything to do with money making, lending or saving is seen as a scary risk.
The only good news with the Iceland collapse is that West Ham are screwed and Kerry Katona has nowhere to shop.
Exactly the point anonymous, you have to wonder why steps weren't taken to make sure this sort of thing didn't happen.
Thanks for the comment, I too am looking forward to the demise of both West Ham and Kerry Katona...
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